Bitcoin slumps more than 10% as Powell raises “serious concerns” about Libra

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Prices of Bitcoin and other major cryptocurrencies slumped on Thursday in Asia after U.S. Federal Reserve Jerome Powell said Facebook Inc. (NASDAQ:FB).’s proposed digital currency Libra raised “serious concerns” and will need intense scrutiny.

Bitcoin plunged 12.3% to $11.540.2 by 12:18 AM ET (04:18 GMT). Ethereum slumped 13.1% to $275.07, while Litecoin lost 17.8% to $101.212.

XRP sank 15.9% to 0.33990.

In testimony to Congress, the Fed chair said Facebook’s proposal raised “serious concerns regarding privacy, money laundering, consumer protection and financial stability” that will need to be “thoroughly and publicly addressed” before the social media giant could go forward with the project.

Powell added that it is not the central bank’s intention to discourage financial innovation. “We just want it to take place in a safe and sound way,” he said.

Maxine Waters, the chairwoman of the U.S. House committee, said earlier that Facebook may be seeking to “establish a parallel banking and monetary policy system to rival the dollar.”

Prices of Bitcoin peaked at $13,200 earlier in the day and has recorded five straight days of rally prior to Powell’s comments, just $700 lower than its 2019 high.

The gains in bitcoin prices earlier this month was mainly been led by institutional investors, especially hedge funds, analysts said.

“Macro managers and high net worth individuals are generally, in my experience, focused almost entirely on Bitcoin,” said Fundstrat Global Advisors’ Thomas Lee.

In other news, while not a directional driver, Fortune reported Wednesday that Visa (NYSE:V) has invested millions of dollars in Anchorage, a startup that secures digital coin holdings for institutional investors.

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